Thames Water rescue deal threatened by missing assets

Ben Marlow

Sun, Mar 23, 2025, 10:15 AM 4 min read

Fresh doubt has been cast over the race to find a white knight buyer for Thames Water as it struggles to provide details of its labyrinthine network of pipes, sewage works and reservoirs.

Thames Water has stepped up the hunt for new investors willing to pump in billions of pounds of emergency capital after the Court of Appeal approved a £3bn emergency debt bailout from its existing creditors.

However, prospective suitors fear the search will be held up by the company’s failure to keep an accurate record of the mountain of assets that it has accumulated over the decades.

Thames Water has just weeks to hammer out a deal or one of the country’s most vital utilities faces a prolonged hand-to-mouth existence in which lenders drip-feed the company enough money every month to pay its bills.

“The board has to advance to the due diligence quickly but this makes that much harder. How do you put a value on the company if you don’t know what it owns?” a source close to the talks said.

The company hopes to select a preferred party from a field of six bidders by the end of June, and to be in the hands of a new owner by the end of September.

Thames Water says it maintains 20,000 miles of water pipes, uses over 68,000 miles of sewers, and owns 5,235 pumping stations. Its assets are valued at just over £20bn, according to an investor report published in September 2024.

However, last year it was revealed that as much as a third of its network was not mapped. In response to a Freedom of Information request from the Financial Times, both Thames Water and Southern Water admitted that they only mapped the pipes as they worked on them, meaning swathes of their respective networks were unaccounted for.

Southern Water, which has had to borrow hundreds of millions of pounds from hedge funds as its credit-worthiness has plunged, said it had lost track of as much as 40pc of its sewage system. The company blamed the ‘prohibitive’ cost of keeping a tally.

Missing data about the true scale and condition of the assets that Thames Water owns, has been a persistent issue in its efforts to persuade creditors to step in with fresh funds to see off the threat of nationalisation.

Without knowing precisely what infrastructure it is sitting on, the company and its lenders have struggled to calculate precisely how much money it needs to set aside for remedial work and upgrades.

An industry source said records of Thames’s creaking network had been lost over time, making it virtually impossible for the company to ever get a full handle on where all of its pipes are.